Kimball Electronics, Inc. Reports First Quarter Fiscal Year 2018 Results
November 01 2017 - 4:05PM
Kimball Electronics, Inc. (Nasdaq:KE), a leading global electronic
manufacturing services provider of high-quality, durable electronic
products, today announced financial results for its first quarter
ended September 30, 2017.
|
|
|
Three Months Ended |
|
September 30, |
(Amounts in Thousands,
except EPS) |
2017 |
|
2016 |
Net Sales |
$ |
253,204 |
|
|
$ |
226,451 |
|
Operating Income |
$ |
9,590 |
|
|
$ |
12,822 |
|
Adjusted Operating
Income (non-GAAP)* |
$ |
9,590 |
|
|
$ |
8,817 |
|
Operating Income % |
3.8 |
% |
|
5.7 |
% |
Adjusted Operating
Income (non-GAAP) % |
3.8 |
% |
|
3.9 |
% |
Net Income |
$ |
8,480 |
|
|
$ |
10,122 |
|
Adjusted Net Income
(non-GAAP)* |
$ |
8,480 |
|
|
$ |
6,698 |
|
Diluted EPS |
$ |
0.31 |
|
|
$ |
0.36 |
|
Adjusted Diluted EPS
(non-GAAP)* |
$ |
0.31 |
|
|
$ |
0.24 |
|
* A reconciliation of GAAP and non-GAAP financial measures is
included below.
Donald D. Charron, Chairman and Chief Executive Officer, stated,
“Double-digit growth in three of our four end market verticals
helped us set a new quarterly sales record for the seventh
consecutive quarter and kept us on a course to achieve our
long-time stated goal of $1 billion in annual sales in fiscal year
2018.”
Mr. Charron continued, “While our margins improved sequentially
from the fourth quarter of the prior fiscal year, we are still
below our new operating income goal of 4.5%. We are focused
on yield and throughput improvements on recently launched new
programs and further progress on the ramp-up in Romania to help us
make sequential, incremental improvement and achieve our new
goal.”
First Quarter Fiscal Year 2018 Overview:
- Consolidated net sales increased 12% compared to the first
quarter of fiscal year 2017, the seventh consecutive quarterly
sales record.
- Operating activities used cash flow of $0.2 million during the
quarter, which compares to cash flow provided by operating
activities of $14.0 million in the first quarter of fiscal year
2017.
- Cash conversion days (“CCD”) for the quarter ended
September 30, 2017 were 59 days, which increased from 58 days
in the same quarter last year. CCD is calculated as the sum
of days sales outstanding plus production days supply on hand less
accounts payable days.
- Investments in capital expenditures were $6.1 million during
the quarter.
- $3.3 million was returned to Share Owners during the quarter in
the form of common stock repurchases.
- Cash and cash equivalents were $38.3 million and borrowings
outstanding on credit facilities were $14.0 million at
September 30, 2017.
- Return on invested capital (“ROIC”) was 9.0% for the first
quarter of fiscal year 2018, which compares to 9.6% for the prior
year first quarter (see reconciliation of non-GAAP financial
measures for ROIC calculation).
Net Sales by Vertical Market:
|
Three Months Ended |
|
|
|
September 30, |
|
|
(Amounts in
Millions) |
2017 |
|
2016 |
|
PercentChange |
Automotive |
$ |
102.0 |
|
|
$ |
92.2 |
|
|
11 |
% |
Medical |
76.2 |
|
|
65.0 |
|
|
17 |
% |
Industrial |
54.8 |
|
|
51.5 |
|
|
6 |
% |
Public Safety |
17.2 |
|
|
13.2 |
|
|
31 |
% |
Other |
3.0 |
|
|
4.6 |
|
|
(34 |
)% |
Total Net
Sales |
$ |
253.2 |
|
|
$ |
226.5 |
|
|
12 |
% |
Forward-Looking StatementsCertain statements
contained within this release are considered forward-looking under
the Private Securities Litigation Reform Act of 1995 and are
subject to risks and uncertainties including, but not limited to,
successful integration of acquisitions and new operations, global
economic conditions, geopolitical environment, significant volume
reductions from key contract customers, loss of key customers or
suppliers, financial stability of key customers and suppliers,
availability or cost of raw materials, and increased competitive
pricing pressures reflecting excess industry capacities.
Additional cautionary statements regarding other risk factors that
could have an effect on the future performance of the Company are
contained in its Annual Report on Form 10-K for the year ended June
30, 2017.
Non-GAAP Financial MeasuresThis press release
contains non-GAAP financial measures. A non-GAAP financial
measure is a numerical measure of a company’s financial performance
that excludes or includes amounts so as to be different than the
most directly comparable measure calculated and presented in
accordance with Generally Accepted Accounting Principles (“GAAP”)
in the United States in the statement of income, statement of
comprehensive income, balance sheet, statement of cash flows, or
statement of equity of the Company. The non-GAAP financial
measures contained herein include adjusted operating income,
adjusted net income, adjusted diluted EPS, and ROIC. These
measures were adjusted for the three months ended
September 30, 2016 due to proceeds from a lawsuit settlement
of $4.0 million, $2.5 million net of tax, and a bargain purchase
gain on the acquisition of Aircom Manufacturing, Inc. of $0.9
million. Reconciliations of the reported GAAP numbers to
these non-GAAP financial measures are included in the financial
highlights table below. Management believes it is useful for
investors to understand how its core operations performed without
the effects of the proceeds from the lawsuit settlement and the
bargain purchase gain. Excluding these amounts allows
investors to meaningfully trend, analyze, and benchmark the
performance of the Company’s core operations. Many of the
Company’s internal performance measures that management uses to
make certain operating decisions exclude these items to enable
meaningful trending of core operating metrics.
Conference Call / Webcast |
Date: |
|
November 2, 2017 |
Time: |
|
10:00 AM Eastern
Time |
Dial-In #: |
|
800-992-4934
(International Calls - 937-502-2251) |
Conference ID: |
|
4796117 |
The live webcast of the conference call can be accessed at
investors.kimballelectronics.com. For those unable to
participate in the live webcast, the call will be archived at
investors.kimballelectronics.com.
About Kimball Electronics, Inc.Recognized with
a reputation for excellence, Kimball Electronics is committed to a
high performance culture that values personal and organizational
commitment to quality, reliability, value, speed, and ethical
behavior. Kimball Electronics employees know they are part of
a company culture that builds lasting relationships and global
success for customers while enabling employees to share in the
Company’s success through personal, professional, and financial
growth.
Kimball Electronics trades under the symbol “KE” on The NASDAQ
Stock Market. Kimball Electronics is a global contract
electronic manufacturing services (“EMS”) company that specializes
in durable electronics for the automotive, medical, industrial, and
public safety end markets. Kimball Electronics is well
recognized by customers and industry trade publications for its
excellent quality, reliability, and innovative service. From
its manufacturing operations in the United States, China, Mexico,
Poland, Romania, and Thailand, Kimball Electronics provides
electronic manufacturing services, including engineering and supply
chain support, which utilize common production and support
capabilities to a variety of industries globally. Kimball
Electronics is headquartered in Jasper, Indiana.
To learn more about Kimball Electronics, visit:
www.kimballelectronics.com.
Lasting relationships. Global
success.
Financial highlights for the first quarter ended
September 30, 2017 are as follows:
Condensed Consolidated Statements of Income |
|
|
|
|
|
|
(Unaudited) |
Three Months Ended |
(Amounts in Thousands,
except Per Share Data) |
September 30, 2017 |
|
September 30, 2016 |
Net Sales |
$ |
253,204 |
|
|
100.0 |
% |
|
$ |
226,451 |
|
|
100.0 |
% |
Cost of Sales |
233,714 |
|
|
92.3 |
% |
|
208,129 |
|
|
91.9 |
% |
Gross Profit |
19,490 |
|
|
7.7 |
% |
|
18,322 |
|
|
8.1 |
% |
Selling and
Administrative Expenses |
9,900 |
|
|
3.9 |
% |
|
9,505 |
|
|
4.2 |
% |
Other General
Income |
— |
|
|
— |
% |
|
(4,005 |
) |
|
(1.8 |
)% |
Operating Income |
9,590 |
|
|
3.8 |
% |
|
12,822 |
|
|
5.7 |
% |
Other Income (Expense),
net |
1,245 |
|
|
0.5 |
% |
|
763 |
|
|
0.3 |
% |
Income Before Taxes on
Income |
10,835 |
|
|
4.3 |
% |
|
13,585 |
|
|
6.0 |
% |
Provision for Income
Taxes |
2,355 |
|
|
1.0 |
% |
|
3,463 |
|
|
1.5 |
% |
Net Income |
$ |
8,480 |
|
|
3.3 |
% |
|
$ |
10,122 |
|
|
4.5 |
% |
|
|
|
|
|
|
|
|
Earnings Per Share of
Common Stock: |
|
|
|
|
|
|
|
Basic |
$ |
0.32 |
|
|
|
|
$ |
0.36 |
|
|
|
Diluted |
$ |
0.31 |
|
|
|
|
$ |
0.36 |
|
|
|
|
|
|
|
|
|
|
|
Average Number of
Shares Outstanding: |
|
|
|
|
|
|
|
Basic |
26,859 |
|
|
|
|
28,078 |
|
|
|
Diluted |
27,028 |
|
|
|
|
28,095 |
|
|
|
Condensed
Consolidated Statements of Cash Flows |
Three Months Ended |
(Unaudited) |
September 30, |
(Amounts in
Thousands) |
2017 |
|
2016 |
Net Cash Flow (used
for) provided by Operating Activities |
$ |
(169 |
) |
|
$ |
14,039 |
|
Net Cash Flow used for
Investing Activities |
(6,066 |
) |
|
(12,284 |
) |
Net Cash Flow used for
Financing Activities |
(948 |
) |
|
(6,664 |
) |
Effect of Exchange Rate
Change on Cash and Cash Equivalents |
944 |
|
|
190 |
|
Net Decrease in Cash
and Cash Equivalents |
(6,239 |
) |
|
(4,719 |
) |
Cash and Cash
Equivalents at Beginning of Period |
44,555 |
|
|
54,738 |
|
Cash and Cash
Equivalents at End of Period |
$ |
38,316 |
|
|
$ |
50,019 |
|
|
(Unaudited) |
|
|
Condensed
Consolidated Balance Sheets |
September 30,
2017 |
|
June 30, 2017 |
(Amounts in
Thousands) |
ASSETS |
|
|
|
Cash and
cash equivalents |
$ |
38,316 |
|
|
$ |
44,555 |
|
Receivables, net |
174,820 |
|
|
169,785 |
|
Inventories |
164,632 |
|
|
144,606 |
|
Prepaid
expenses and other current assets |
31,126 |
|
|
29,219 |
|
Property
and Equipment, net |
136,915 |
|
|
137,549 |
|
Goodwill |
6,191 |
|
|
6,191 |
|
Other
Intangible Assets, net |
4,423 |
|
|
4,581 |
|
Other
Assets |
19,079 |
|
|
18,458 |
|
Total
Assets |
$ |
575,502 |
|
|
$ |
554,944 |
|
|
|
|
|
LIABILITIES AND
SHARE OWNERS’ EQUITY |
|
|
|
Borrowings under credit facilities |
$ |
14,000 |
|
|
$ |
10,000 |
|
Accounts
payable |
166,655 |
|
|
154,619 |
|
Accrued
expenses |
33,443 |
|
|
34,630 |
|
Other |
12,432 |
|
|
13,423 |
|
Share
Owners’ Equity |
348,972 |
|
|
342,272 |
|
Total
Liabilities and Share Owners’ Equity |
$ |
575,502 |
|
|
$ |
554,944 |
|
Reconciliation
of Non-GAAP Financial Measures |
|
|
|
|
(Unaudited) |
|
|
|
|
(Amounts in Thousands,
except Per Share Data) |
|
|
|
|
|
|
|
|
|
Operating Income excluding Lawsuit Proceeds |
|
|
Three Months Ended |
|
|
September 30, |
|
|
2017 |
|
2016 |
Operating Income, as
reported |
|
$ |
9,590 |
|
|
$ |
12,822 |
|
Less: Pre-tax
Settlement Proceeds from Lawsuit |
|
— |
|
|
4,005 |
|
Adjusted Operating
Income |
|
$ |
9,590 |
|
|
$ |
8,817 |
|
|
|
|
|
|
|
|
|
|
|
Net
Income excluding Lawsuit Proceeds and Bargain Purchase
Gain |
|
|
Three Months Ended |
|
|
September 30, |
|
|
2017 |
|
2016 |
Net Income, as
reported |
|
$ |
8,480 |
|
|
$ |
10,122 |
|
Less: After-tax
Settlement Proceeds from Lawsuit |
|
— |
|
|
2,499 |
|
Less: Bargain Purchase
Gain |
|
— |
|
|
925 |
|
Adjusted Net
Income |
|
$ |
8,480 |
|
|
$ |
6,698 |
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings per Share excluding Lawsuit Proceeds and
Bargain Purchase Gain |
|
|
Three Months Ended |
|
|
September 30, |
|
|
2017 |
|
2016 |
Diluted Earnings per
Share, as reported |
|
$ |
0.31 |
|
|
$ |
0.36 |
|
Less: Impact of
Settlement Proceeds from Lawsuits |
|
— |
|
|
0.09 |
|
Less: Bargain Purchase
Gain |
|
— |
|
|
0.03 |
|
Adjusted Diluted
Earnings per Share |
|
$ |
0.31 |
|
|
$ |
0.24 |
|
|
|
|
|
|
|
|
|
|
|
Return on
Invested Capital (ROIC) |
|
|
|
|
|
|
Three Months Ended |
|
|
September 30, |
|
|
2017 |
|
2016 |
Adjusted Operating
Income |
|
$ |
9,590 |
|
|
$ |
8,817 |
|
Annualized Adjusted
Operating Income |
|
$ |
38,360 |
|
|
$ |
35,268 |
|
Tax Rate |
|
25.7 |
% |
|
22.7 |
% |
Tax Effect |
|
$ |
9,859 |
|
|
$ |
8,006 |
|
After Tax Annualized
Adjusted Operating Income |
|
$ |
28,501 |
|
|
$ |
27,262 |
|
Average Invested
Capital * |
|
$ |
316,187 |
|
|
$ |
283,490 |
|
ROIC |
|
9.0 |
% |
|
9.6 |
% |
* Average Invested Capital is computed using the average
quarterly Share Owners’ equity plus current and non-current debt
less cash and cash equivalents.
CONTACT:Adam W. SmithTreasurerTelephone 812.634.4000E-mail:
Investor.Relations@kimballelectronics.com
Kimball Electronics (NASDAQ:KE)
Historical Stock Chart
From Jun 2024 to Jul 2024
Kimball Electronics (NASDAQ:KE)
Historical Stock Chart
From Jul 2023 to Jul 2024